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I’m a Big, Fat Hypocrite: Our Updated War on Debt

in Do What You Love, Our Financial Journey

Hypocrite

It’s been a while since I updated everyone on our ‘War on Debt’.

Why?  Well, I don’t know for sure.  Maybe because very little has changed since we’ve been overseas.  Maybe because there have been more sexy things to talk about.  I guess our foot has kind of come of the gas a little.

“But… but… you talk about passion… and intensity…  and focus…  like every other post!”

Yes.  Yes, I do.

“So…  I guess this is awkward…  this kind of makes you a hypocrite, right?”

Well… it’s complicated.

This was an actual conversation I had with myself not too long ago.  “It’s complicated” was the best I could come up with.

You know, I try really hard to walk-the-walk.  It’s something that’s very, very important to me.  I try to be transparent, open, and most of you know I don’t hesitate to point out my failures.

But this issue really gets me.  After all, the name of the site isn’t:

www.mantravelsaroundtheworldwhilehepaystheminimumonhisstudentloans.com

Hmmmmm, I wonder if that’s taken.

In my defense, though…

In my defense against myself, I would like to point out three things to me.

  1. It wasn’t always this way. Courtney and I spent 16 months with the pedal to the flippin’ metal.  We purged everything from our life.  We lived on 1/3 of one salary.  We slaughtered $18,000 in consumer debt and saved up nearly $17,000 in cash for our trip.  The last few months before we left, we even moved back in with family to keep the intensity maxed.  I’m proud of this stage of our journey.
  2. We planned for this. Everything was intentional.  We knew we’d pay the minimums on our student loans for a year, which is why we saved extra.  We’ve always planned to have our $5,000 emergency fund no matter what (even if it meant pulling the rug out from the trip and going home).  And we told ourselves it was o.k. to spend the rest on this trip.  It was deliberate and we sacrificed for it.
  3. We’ve stabilized our income/expenses. It took a little longer than expected, but we’ve accomplished finding a job, getting an apartment, and creating an overseas lifestyle where we could spend less than we earn.  We are able to live on less than Courtney’s income here and my freelance work pays for the minor business expenses and the student loan payments.  There’s not a lot of room, but technically we are cash flow positive.

Now that the excuses are out of the way…

Let’s face the facts now.

Fact: Courtney and I spent between $8000-9000 so far on the trip (the far, far majority of that on international airfare).

Fact: We could’ve stayed home, delayed the trip 18-24 months, both worked full-time (and me on weekends, too) and been 100% debt-free.  That would have required us to maintain the same intensity we had for the year and a half before our trip.

Fact: I could be working full-time here, as well.  We’d love for one of us to stay home with our daughter, but I *could* be working and sending money back to pay on debt.

Fact: We are planning on dropping another $2500-3000 USD on a 3 week tour of the South Island (NZ) in December.  (Although once again this is planned and we are paying for everything upfront and without credit…  oops, there go the excuses again).

Fact: We aren’t saving a penny for retirement.  We’ve prioritized the trip, building up business income, and our debt all before retirement.

Fact: We haven’t exactly been a shining example of traditional personal finance wisdom.

Don’t get me wrong, half of me loves what we are doing.  It really does.  But the other half wonders whether we copped out.  Whether we quit early, got lazy, and started justifying.  Sure maybe we didn’t fall into the typical ‘lifestyle inflation’ pattern, but isn’t what we are doing just another form of it?  Lifestyle Design Inflation, maybe?

Our remaining debt…

I’ve also added the table below to our permanent Finances page for future reference.

Debt Code Name
Outstanding Amount
Interest Rate
Sallie Mae Alpha Unit$15,4005.9%
Sallie Mae Beta Unit$11,3006.1%
Sallie Mae Gamma Unit$7,3505.8%
Nellie Mae Airborne Division$5,6005.5%
Citibank Guerrilla Troops$4,7004.4%
Sallie Mae Delta Unit$3,4005.9%
Sallie Mae Special Forces$3,3009.3%
Sallie Mae Scouting Party$1,1002.5%

Note:  For those of you that don’t know, back in the first week of this blog I gave military-sounding codenames to our remaining debt.  I’ve decided to keep them…  I kind of like the way they sound!

As you can see, we still owe a respectable amount of debt.

For the time being, we are still going to maintain paying the minimum payments.  Our ‘year’ that we gave ourselves ends this coming April, at which point the plan in to re-enter attack mode.  Until then our priorities are as followed:

  1. Never do anything that requires the use of NEW debt.
  2. Never let our emergency fund dip below $5000.
  3. Always at least pay the minimums.  None of that ‘deferring’ student loan crap.
  4. Travel and experience the world as frugally as possible.
  5. Build a mobile income of at least $3000/month.  (It’s no secret I plan for MvD to be a big part of this)
  6. Have at least one of us staying home with Milligan.
  7. Pay extra on student loans.

It’s my sincere hope that come April, we’re able to have a mobile income that allows us to maintain a frugal mobile lifestyle of travel.  We want to give ourselves $3,000/month to live.  Anything above that will be thrown at our debt according to our own Debt Tsunami method.

  1. The Scouting Party. It’s not only the smallest, but is the last debt in my name.  We’ve been looking forward to the day we could put a bullet in it’s head for a long time now.
  2. The Special Forces. It’s the second lowest balance and by far the highest interest rate.
  3. CitiBank Guerrilla Troops. I hate CitiBank more than I hate Sallie Mae.  This is a random loan that requires a special way to pay it and a special log-in.  It annoys me.
  4. Nellie Mae Airborne.  The remaining Sallie Mae’s at this point are lumped together (in two separate loans).  This makes a third loan, is close to the next lowest balance, and is relative in terms of interest rate to the others.

So, what do you think?  Am I a big, fat hypocrite?

There it is folks.  The raw and honest plan for the next 6 months of our life.  Like I said…  it’s complicated!

You can be honest, now.  Do you think we quit early?  Should I quit preaching about passion, intensity, and focus if I’m not going to back it up?  What about you… are you walking-the-walk?

{ 110 comments… read them below or add one }

prufock October 22, 2009 at 10:53 AM

“The Special Forces. It’s the second highest balance and by far the highest interest rate.”
Don’t you mean the second lowest balance?

One of my grammar pet peeves: “We could of stayed home”
Could HAVE, not could OF.

I’m not walking the walk. I’ve had a big sum sitting in the bank that I keep intending to pay on my car, but it sits there still. I’m paying the minimum on my student loan, but that’s intentional, at least until the car is paid.

Were I you, I probably would have deferred the trip. I’ve been putting off a vacation/trip of my own for a while now. At some point, though, you just have to live your life. It will be at least 2 years before I’m debt free. Do I want to wait that long before taking that trip? Probably not.

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Baker October 22, 2009 at 3:09 PM

First, I corrected the two things you pointed out. Thanks!

Second, your own dilemma is exactly how I feel. We thought if we waited we might never go, etc… Interesting to examine whether that is just an justification or not. :-)

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Daniel October 22, 2009 at 11:03 AM

I just graduated college, have about $25,000 in student loans, but don’t really understand what the big deal is. Sure, my expenses are extremely low because I’m not supporting a family yet, but I can’t imagine myself getting into other types of debt. Should I be scared because it seems like it happens to everyone and I’m no exception? Or have I started out on the right track and should be able to contain myself?

Your plan sounds good, and I think as long as you have a plan, you’re going to be fine. Sure, you could have kept going and been vigilant, but you made a choice and are sticking to it, and there wil be time to pay off the debt. Besides, you just know this blog is going to be making money. Are you waiting for a certain number of followers before monetizing?

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Baker October 22, 2009 at 3:12 PM

It sounds like your *are* on the right path, so I think you’ve gone a long way to preventing yourself from the ‘normal’ debt progression.

I’ll be doing more heavy monetization in the coming months as I work towards my goal. I didn’t want to do it in haste and I wanted to ensure I did it in a way that didn’t make me feel sleezy. I’ll be releasing a cheap, co-branded ebook as the first step. I think people are going to dig it! :-)

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Daniel October 23, 2009 at 8:32 AM

I’m excited for it to come out! I’ve actually avoided e-books in the past, but for some reason, am very excited about this one. I think not feeling sleezy is pretty important, and you’ve clearly put a lot of thought into how you want to accomplish your goals. It’s apparent you aren’t willing to sacrifice your morals, which is nice for us (although 99.9% of the time, which company’s banner I see will have no effect on whether I return to a site).

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Cynthia January 16, 2012 at 7:46 PM

I just got a Kindle DX (paid for in one semester’s savings compared to regular textbooks) and would love to pick up your ebook in the next year. I hadn’t heard your story before the YNAB interview, but I agree with much of your philosophy. For me freedom is a similar sense of being untethered, but much more local.

Le Budget Boheme.

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Robert October 22, 2009 at 11:03 AM

Don’t feel too bad. You gotta have SOME excitement in life. That’s what excess money is for, right? To have fun and live a little?
.-= Robert´s last blog ..Driver Racks Up 15 Tickets in 11 Minutes =-.

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Noelle October 22, 2009 at 11:23 AM

I think the most important point here is that your travel/move was an *intentional* decision on the part of you and Courtney. You planned for it: you beat down on the debt before you left so the minimums would be manageable; you planned and traveled quite cheaply given that you went halfway around the world; you got a reasonable place to live, jobs (1. teaching 2. taking care of Milligan), and no new debt. Maybe you could have waited, but things seem to be working out great (btw, spend excessive amounts of time with your daughter, it is SPOOKY how fast they grow up), so quit second-guessing yourself and just move forward. I think you guys are doing a great job and an inspiration.

Since you asked: personally, we are now 11 months with only one regular income and some occasional freelance income (I was laid off last December from the good job with benefits) , so we are trying to be frugal, but we go through periods of splurging on incidentals like dinners out because we feel so beat down by the constant penny pinching to get by. No new debt (yet), but little pieces are coming off the emergency fund. We are sort of shuffling-the-walk right now.
.-= Noelle´s last blog ..What I’m doing =-.

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Baker October 22, 2009 at 3:17 PM

Noelle, thanks for your support! The fact that all this was intentional *is* the number one thing that lets me be ‘at peace’ with our decision. Had we just left on a whim, I’m sure I would feel very different.

Kudos to you on adapting to the one income (and looking for freelance opportunities). Sounds like an interesting journey. I hear you on the splurging, too.

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Wayne October 22, 2009 at 11:37 AM

Your plan works for you and your family and it’s my opnion that you haven’t taken your eye off the ball. We all struggle to prioritize our goals. I continue to have multiple goals that I want to complete now. It’s a juggling act. Stay the course you have set for yourself and continue to question and reevaluate along the way.

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Baker October 22, 2009 at 3:18 PM

Great advice, Wayne. Thank you.

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Diggy - Upgradereality.com October 22, 2009 at 11:37 AM

I think you’re awesome for sharing this!
It’s good to take a break and live a litte, just stick to your april re-attack mode :)

You’re a great example!
Cheers!
.-= Diggy – Upgradereality.com´s last blog ..Take Advantage of Wasted Time =-.

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Michael Harr @ TodayForward October 22, 2009 at 11:37 AM

@Baker – nah, you’re no hypocrite…you’re human. We don’t exist in a vacuum where there are only two choices – payoff debt or not. Your question is one of payoff debt or experience something that many dream about, but few accomplish. You’re an enterprising sort of guy, so I’m sure you’ll be able to make back your investment in this journey you’re on. Besides, you have a vibrant community on this blog and whatever you put out there I’m sure it’ll get some support.

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Baker October 22, 2009 at 3:22 PM

Great point, Michael. I don’t like getting myself into situations that I have to ‘make up’, but this is one where I feel like my experience and growth through this journey really will help me in the future! I’m stoked to have your support. :-)

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Jeff October 22, 2009 at 11:39 AM

I wouldnt go quite as far as calling you a hypocrite, because you’re not deferring your loans. I realize that sometimes things happen, and your original plan does not quite pan out as you had hoped. However, continually striving on to defeat the debt (even at the small, minimum payment level) isnt going to hurt in the long run. Sure, it’s going to take you a bit longer, but on the other hand, there arent many people who have had the chance to live abroad for a year, and there are not many people under the age of 3 that can say that.
Keeping up your cash reserves, and having committed spot for any excess income will do you good in the future.
Because you asked, I’m still working on paying down my debt, and including all extra minimum payments to my consumer debt. I’ve felt a bit more comfortable in my financial position as of late, but wont feel great until I can completely be debt free. Im hoping that it will be by Jan 1, 2010, but that’s not looking likely. I’ll just keep at it, and soon, i’ll have it gone. There has been no new spending on any of my cards since July.

All in all, I think that I’m siding with noelle on this one. Your move was planed, prepared for, and entirely paid for up-front. Can it get much better than that? Many people have 20 years (or more) to pay off the student loans, and if you would have waited that long, your opportunites for taking the trip could have vanished due to other committments.
.-= Jeff´s last blog ..Tired of Paper Towels =-.

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Baker October 22, 2009 at 3:28 PM

Thanks for the insightful comment and adding in your own experience! Yeah, *not* deferring our loans is of big importance to us. It’s not worth it if we had to take on new debt or not pay our existing commitments, for example.

It sounds like you are so close you can taste it! Don’t get too ‘comfortable’ though, hehe. Let me know when you’ve finished it off!

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Kristin October 22, 2009 at 11:41 AM

I second Noelle’s comment. Your decision to start traveling now, and every other decision on how to do that in an affordable way, was intentional. It was all well thought out and planned. You’re covering your minimums, you’re not establishing new debt, and you’re enjoying your life now rather than waiting. Maybe I’m missing something, but it seems to me that you’re walking the walk just fine.

So maybe you’re not doing it all the way the *experts* suggest. If it’s working for you and generally moving your life in a more positive (in terms of experiences, finances, and other goals) directions, then that sounds pretty successful to me. Keep doing what you’re doing and I’ll keep reading about how you’re making the walk work for you.
.-= Kristin´s last blog ..fuck ‘i love you’ =-.

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Baker October 22, 2009 at 3:37 PM

Haha, making the walk work for you. I love it! I’m probably going to steal that, so I hope you don’t mind. ;-)

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Sue Dyson October 22, 2009 at 11:55 AM

Hypocrite? Are you kidding me? How about living life on your own terms? I think your little army of three are doing awesome. The world is changing. We can no longer afford, in energy terms,not to follow our calling. It was your calling to do this. You’re doing it. It’s all going to work out just fine.
.-= Sue Dyson´s last blog ..Waiting To Forgive =-.

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Kevin M October 22, 2009 at 12:04 PM

Your sub-title for this blog is “Get out of debt, get into life”. It seems like you’re doing the latter in the short-term (the move to NZ) and planning for the former for the long-term. I don’t see that as hypocritical.

Do your values tell you otherwise? Would you prefer to be debt-free or living abroad?

I think your goal of $3,000 is a bit low (if it includes Courtney’s salary). You’ve already spent $2,200 in Oct, with a week remaining. Personally, I’m not sure that is very frugal. Maybe it’s just the cost of living where you’re at? Or is that $3k just designed to cover your expenses each month? If so, there’s not going to be much extra to fund your Debt Tsunami. (In comparison – our family spends about that much monthly, but almost half goes to our mortgage, which we’ll have paid off in 15 yrs if all goes according to plan. At which point we’ll be able to live on well under $2k per month, inflation not withstanding.)

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Baker October 22, 2009 at 3:41 PM

Thanks, Kevin! I’m not sure about my values I guess. Deep down I think they tell me to do what I’m doing, but I *do* have values that truly believe in sacrificing and maintaining the intensity on debt, etc.

The $3,000 is just a basis we want to give ourselves. We lived on far less than that in Indiana for our aggressive period. Right now, our expenses are a little higher from cost of living downtown Auckland (we could move more rural). Also, we’ve had some set-up bonds, fees, and purchases early this month.

Funding the Tsunami will come from amounts above that. I’m confident we can live a lifestyle (even mobile at that) on $3k per month. Although, I’m hoping our income exceeds that obviously in the future :-).

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Lisis October 22, 2009 at 12:08 PM

Easy on the labels there, hon. You’re not a hypocrite, you’re just going with the flow… making the most of your experiences in a reasonably responsible manner. You’ll get back on track without any trouble. In the mean time… ENJOY.

:)
.-= Lisis´s last blog ..Music Therapy: Jack Johnson “Imagine” =-.

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Michelle Traudt October 22, 2009 at 12:28 PM

Being transparent like you were today on this blog just makes you a real person with a real life. The fact still remains that you have paid a lot of your debt off, and you have an emergency fund. You are getting to see some great places and one of you stays home with your child. All of those things are great. Just keep going, don’t look back and if there are some bumps in the road…well, that is just life. You just keep going and doing your best. You are doing a great job!
.-= Michelle Traudt´s last blog ..Journaling is Just Good For You =-.

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Baker October 22, 2009 at 3:43 PM

Wow, a great ‘pep’ talk. Thanks, Michelle. :-)

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Beating Broke October 22, 2009 at 12:40 PM

It sounds to me like the only thing you’re really not walking the walk on is the aggressive debt repayment. You’re not adding any new debt. That’s good. You’re still paying your bills. That’s good. Sure, you’re not adding to retirement, but you’re having the time of your life, right?

There’s something to be said about living your life passionately too!
.-= Beating Broke´s last blog ..Save a Little Money with PaperBack Swap =-.

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Martin October 22, 2009 at 12:42 PM

Nope, not a hypocrite. Sounds like your trip and decisions were all well thought out and premeditated.

For me, I give myself a B- for the year. Paid off all credit card debt and most of my student loans. Should be saving more though, and my emergency fund is more life jacket than inflatable raft.

Part of the appeal of your blog is the transparency and honesty in your posts. Thanks for sharing.
.-= Martin´s last blog ..Art of Day to Day Improvement =-.

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Cynthia Daly October 22, 2009 at 12:53 PM

I am a true believer in following your dreams while you have the chance. There are so many distractions in life and many people die never scraping even the surface of their dreams. You and your spouse made a strategic decision and executed it well. I am proud to see young people accomplishing their goals. I encourage you to stick to the plan and enjoy life.

I have been walking the walk for the past 13 years of not creating bad debt and saving for retirement. I have delayed a planned trip to China for a few years to build a home but once the home is completed next month, I will start planning for the trip to China in 2010. This freedom from debt bondage is the best gift I could have given myself.

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Baker October 22, 2009 at 3:46 PM

Wow, Cynthia, way to freakin’ own it. I’m sure your sacrifice and waiting will be paid off, especially once that home is complete. What parts of China are you going to?

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Jill MacGregor October 22, 2009 at 1:11 PM

I am eternally in awe at your transparency!
I gotta tell you, I think you’re working it like a rock star. You’re paying off the college loans, supporting a family, saving, paying off big college loans…your family has a well thought out plan. On occassion, all plans require a little revising.
Your street cred is in tact.
Take Care,
Jill

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Baker October 22, 2009 at 3:47 PM

Haha, glad to know I can walk the streets proudly. ;-)

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Andrea October 22, 2009 at 1:12 PM

The way I see it, you’re still a lot more on the path than you were before your daughter was born. Being debt free is great, but not at the cost of living life, there’s got to be a balance. You’re on the trip of a lifetime, enjoy it.

To answer your question, I’m walking the walk most of the time. I’ve paid off $26000 worth of student debt ($14000 left!) in the past 23 months. I paid for most of our wedding (approx $8000) a few months ago, and if we’d just had a small backyard affair I could be a few months away from being debt free. But I wouldn’t have traded our wedding for anything.

Kudos to you for being honest with yourself (and us) but winning the war is about the long haul, not the skirmishes

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Baker October 22, 2009 at 3:49 PM

Great point about not focusing on the ‘skirmishes’. Funny thing is our wedding added to a lot of the consumer debt we *did* pay off before leaving. I’m with you, we could have saved a lot of money, but we wouldn’t have traded it either.

Sounds like you’ve got an awesome pace going! If my math is right (and you maintain your pace), you’ve only got about a year left. That rocks!

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Four Pillars October 22, 2009 at 1:21 PM

I would say that yes, technically you did ‘cop out’ in the sense that you deliberately did an action that delayed your debt repayment.

As for paying with cash – if you have any debts that you could have put that cash in then you are essentially borrowing that money.

Ok, harshness aside – your loans aren’t really all that crazy – once you get your incomes increased a bit then you should be able to hack $1k-$2k of debt away per month.

The other thing is that you made the decision to defer any debt repayment for a year and long term, I don’t think that will cause any problems for you. In other words it wasn’t a stupid decision.

Am I walking the walk? You better believe it – killing mortgage debt and adding to retirement savings with impunity. However, unlike you – I’m old – I can see the (semi) retirement finish line and that is a huge motivating factor for me.
.-= Four Pillars´s last blog ..Working With Computer Nerds =-.

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Baker October 22, 2009 at 3:53 PM

You are completely right. I feel the same way about the spending while you are in debt concept. However, I do feel good about not *adding* new debt to the equation. Hopefully, the habit of saving up cash w/ carry over even after the loans are gone. :-)

And you’re also right about the income situation. Really that’s are primary concern right now. Rather than both work $40-50k per year average jobs (not horrible, not great) we are looking for a way to raise our income while still doing something we are passionate about!

Once that is up… watch out! :-)

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Tyler Karaszewski October 22, 2009 at 1:28 PM

What the heck did you get a degree in, anyway? Was it worth the expense?

And you seem adamant about keeping that $5k emergency fund at all costs. What if there’s an actual emergency?

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Baker October 22, 2009 at 3:57 PM

I failed out of college (engineering) with around $4,000 in debt at it’s peak. In my situation, the experience was probably worth that price tag. Learned a lot and it lead to other wake-up calls.

Courtney worked and put herself through college on loans. She actually *did* graduate in Elementary Education. Was is worth it? Not sure. Probably not in monetary terms as we are likely to head a different direction (don’t think she’ll be teaching for an extended amount of time). There was no way to know that at the time for her, though. And the degree *has* helped us over the last year or two.

Yeah, of course, we’d use the emergency fund in an emergency. However, we want to make sure our definition of ‘emergency’ doesn’t start to slowly grow and grow. In other words, we’d try to come up with the money in another way first.

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Suzanne October 22, 2009 at 1:32 PM

I am fairly new to your blog so I don’t know the reasons behind the timing of your trip down under. Paying off your debts is clearly a high priority for you, therefore I’m curious about why you decided to take this trip before the debts were paid off? Were you at a crossroads in some way? You’re very young, so maybe this seemed like the time before careers got in the way?

Since you asked…. I am proud to say that I am walking the walk! It has taken me years of paying virtually nothing towards my debt principle before I finally “got mad at the debt” and decided it has to go. I have cut back my lifestyle, and will have all of my non-mortgage debt (about $36k) paid as well as a 6-month emergency fund saved within 3 years from now. I spent the past year saving up 3-months of the emergency fund. I could do it all faster if I hadn’t bought a condo pretty far out of my price range 6 years ago. But that’s what people did in 2003. We know better now. I’m glad to say that I have a significant amount of equity in it, but those monthly mortage payments, along with the student loans, are debilitating. October of 2012 is the month it will all be done!

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Baker October 22, 2009 at 4:01 PM

Well, in reality our decision to sell everything and move overseas was a *huge* part of the motivation to be intense about debt. We had started to clean it up a little prior towards the decision, but the birth of Milligan was when we hatched the full plan.

Had we waited another 2-3 years, we thought we would be too fixed into our situation and we might never go (more kids, more career, more business attachments, etc).

It also sounds like you are rocking it! October 2012 will be here before you know it. Way to have such a concrete plan and to know your end date and goal. :-)

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Sean October 22, 2009 at 1:33 PM

If there is one thing I have learned, it is that everyone, from time to time is a hypocrite. I am guilty of it, I even wrote a post about it! But I don’t view this as a negative thing. Everyone’s circumstances are different, and everyone requires different things to be successful. As long as you recognize what your long term goals are, and are working to get there, no one can fault you for that.

Just keep making at least the minimum payments! I have often thought about deferring my student loans, but refuse to do so!

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Jacqjolie October 22, 2009 at 1:53 PM

While I don’t think you’re a hypocrite, I do think your priorities have shifted to more of an “enjoy life now” mode. It’s like a binge after a strict diet. I would look at a more balanced approach myself if I were you because I have made the choice in the past (as a debt free single parent) to live in another country AND amass savings.
Personally, I wouldn’t have made the choices that you have made because true freedom to me means not being in debt and having complete freedom over my time – WHERE I am is not as relevant. But then, I’m retiring in a couple of months (at 44 y.o.) – so that’s just MY priority. You’re absolutely correct that your priority is lifestyle design over extinguishing your debt. Lifestyle design just seems sexier than a BMW nowadays but the same principle of not being able to delay gratification is at the core.
I also wouldn’t really want to be living in another country if I had to very carefully watch my spending and not take advantage of the once in a lifetime opportunity to do things or see things.
I think when you’ve been in debt and are focused only on getting out of debt (and I’ve been there, done that and decluttered the T-shirt), it’s very difficult to see what you’re missing by not having the money on hand to take advantage of great financial opportunities. During that time when you were saving to take your trip, I was saving to put money into the market and bought in at a great time. Your decisions cost you $17k (actually more since you’d probably be much further ahead if you would have stayed home), my decisions made me a few multiples of that. Only you can answer whether this year has been worth ~$40k+ to you or not.
I’m probably a fair bit older than your average reader (and an accountant), so my perspective may be different. :-)

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Baker October 22, 2009 at 4:08 PM

There’s not a chance in the world I would have risked $17k in the markets. Did I miss out on an uptick recently? Sure. I also have been completely immune to the market tanking the 6 months before that.

For me there are at least 10 things on my list of valuable things to do with my money above risking it in the markets. We’ll get to the point where we’d like to have money in the markets, but it will never be a timing issue for me.

But I do agree with the ‘true’ freedom that comes with debt freedom. We aren’t really that free right now even w/ traveling. I know we are missing out on parts of the trip because of monetary restraints, too! We can always come back though when we have the money, business income, and security to really ramp it up! ;-)

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Sarah October 22, 2009 at 2:10 PM

You: I don’t think you’re a hypocrite, because you are still paying off debt and have a plan for how to get back to paying it off faster. All good personal finance advice says you should not drive yourself crazy! If I were you, I’d be made nervous by the retirement thing and would try to sock away at least a little — compound interest is your friend right now — but maybe your tolerance is greater than mine.

Me: I’m about to move back in with my folks, partly because I want to pay off debt more quickly with the goal of buying a house. I have a lot of debt, but only a few hundred dollars (which I will blitz in November) above 3%. After November, I’ll have only student loans and 0% interest stuff — which still adds up, but which I should be able to pay down quickly. Starting next month, I’ll also put more towards my emergency fund (which I’d like to see at $10K) and saving for a downpayment for a house; I also plan to increase my retirement savings slightly. The thing I still need to work on: I love luxuries and I spend money on them. I need to find a sustainable middle ground, because achieving my financial goals is going to take a couple of years!
.-= Sarah´s last blog ..Presence =-.

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Jesse October 22, 2009 at 2:20 PM

Ya know what, it’s your life. You may share a huge chunk of it with us here in the net world but your values are different than other peoples. Traditional isn’t always the best way to do things.

My wife and I eat out, even though the PF world sees that as a waste of money that should be put towards debt. Guess what? We value the time we have eating away from home. We cook at home much more often then most people do and we are happy with the balance we have created for our life in that respect.

You are your only judge, who gives a crap what we say :) you made plans, are following them and have done an incredible amount in a pretty short time period. That is more than can be said about 90% of the population, USA or abroad.

You may want to read my post linked below, if you haven’t already. It’s on exactly this topic, value vs dollar.
.-= Jesse´s last blog ..What Is Your Dollar Really Worth? =-.

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Shannon OD October 22, 2009 at 2:20 PM

Not a hypocrite at all. Life is about moderation right?! Debt is like a diet, it only works if you make it feasible to sustain for the long-term. You guys busted ass for a long time and it’s not like you are completely shirking it all – you are reenergizing so that you can head back and tackle the last of the debt. That deserves mad props because stripping your income down like that and ruthlessly saving could not have been easy.

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Jon Griffith October 22, 2009 at 2:23 PM

Baker, attack the debt. You’re not a hypocrite, you’re human. I would adjust your plan to get rid of the debt as fast as possible, because the freedom that you’ll feel once you get there will allow you to enjoy those international trips much more.

Robert, when your debt exceeds your cash on hand, you don’t have excess funds, you have a negative net worth.
.-= Jon Griffith´s last blog ..Cooler Weather, Lux =-.

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Foxie | CarsxGirl October 22, 2009 at 2:24 PM

Well, when it comes to most things, you have to let the haters hate. Really, you don’t owe anyone an explanation for anything, so the fact that you so willingly provide one is enough to show that any actions that could be deemed hypocritical were not intended to be that way.

Honestly, though, it’s why I gave money writing a rest. While I enjoyed it, I felt guilty putting my own story out there. I mean, sure, I’d love to show people that I can afford my hobby… But it’s not that productive to me. I can do more good by showing my passionate side of my hobby, not feeling like I have to defend every tiny action that happens.

I cannot wait until we get to go on our huge European trip. It’s going to be wildly extravagant in terms of what we do, but very minimal in what we don’t need — I’m thinking hostels, public transportation ftw, cheap meals, etc. I can’t wait to start saving for it, but at the same time, my projects here are whining for my attention, as well as dollars. Having the car loan has definitely helped show me that I don’t need a ton of spending money to be happy, and it’s a trend I’m hoping to continue after she’s paid off. (Only six months to go, I think!)

If I walk any walk, it’s that I speak from my own experiences. I purposefully modify cars for racing, and I go out and race them. I haven’t thrown a bunch of money into a car, then make her into a garage or show queen. Sadly, I’ve seen guys build cars into potential track monsters, when the car only pulls occasional weekend-duty. It’s a waste, and a shame.

PS – Ya got me, I just signed up for twitter. ;) I’m working on figuring it out, makes me feel so damn old that I hesitate to embrace new technology like this… @foxytuner
.-= Foxie | CarsxGirl´s last blog ..The Year of Extravagant Birthdays =-.

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Jessie October 22, 2009 at 2:41 PM

I’m curious what a ‘respectable’ amount of debt is/means?
.-= Jessie´s last blog ..Bill Reduction =-.

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Baker October 22, 2009 at 4:10 PM

It was just sort of a joke meaning that we still have a big number left, ;-).

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Millionaire Mommy Next Door (Jen) October 22, 2009 at 2:53 PM

Here’s what I sense about you, Baker. You sound like an all or nothing kind of guy. You attack your goal with intense, fervent focus, then grow weary (understandably) and your resolve slips. This is when your excuses come up to rescue you.

As I opined to you before, I find success comes easier and is long-lasting when goals are constructed as life-long lifestyle habits rather than as something to be “attacked”. Again, think healthy foods & eating habits vs fad diets. Or aligning your spending habits with your lifelong personal values vs I-gotta-have-it-now-cuz-I’m-not-getting-any-younger thinking.

I’m curious, Baker, how much are you enjoying all that New Zealand has to offer? You are in paradise. Don’t wait for your “3-week tour” to experience it. Don’t DO life. LIVE it!
.-= Millionaire Mommy Next Door (Jen)´s last blog ..Lose The Extra Weight and You Are Likely To Increase Your Wealth =-.

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Michael Harr @ TodayForward October 22, 2009 at 3:31 PM

Jen – You point out one of the great quandaries in personal financial behavior (among other areas). On the one hand, bad habits need to be broken and replaced with good habits and this usually only happens through an intense desire for change. On the other hand, too much too soon often leads to burnout and no lasting changes.

This issue always reminds me of books like Think and Grow Rich or The Secret where there has to be a desire to make positive steps and that this desire needs to be renewed continuously. Baker got off the train leading to rapid debt elimination, but he decided to jump on the train of unique life experience. Based on this blog, the community that he has developed, the public accountability that is Man v Debt, and his overall attitude, I think it’s a cinch to say he’ll be back on the fast train to debt elimination when he gets back in April.

@Baker – You’ve got six month remaining so make ‘em count:)

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Nancy L. October 22, 2009 at 3:00 PM

Sometimes I feel like the whole “Gazelle-intensity” is almost a mania. If we were talking about getting in shape (ManVsFat link, lol?), of course it would be amazing to dedicate a month or two straight to working out non stop. But that doesn’t mean that the person scratching out 2-3 hour long workouts a week, or even the person just trying to walk regularly won’t be making progress as well.

You haven’t stopped paying down debt, you’ve just slowed the rate at which you are doing it. If you were starting to move in the other direction, and considering taking on more debt, then I might say something different. But right now, you are continuing to make progress AND you are enjoying an incredible experience. That’s a win-win in my book.

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Mandy October 22, 2009 at 3:02 PM

I am impressed with your candor, and with your honesty with yourself. I think you are doing fine, especially because you have a plan in place, and are working towards your goals. Does refocusing your goals, and adjusting your methods make you a hypocrite? Absolutely not!
.-= Mandy´s last blog ..Grocery Ads =-.

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H Lee D October 22, 2009 at 3:26 PM

I’ve been putting off traveling ‘until I have money’ and it hasn’t happened yet … so good for you for planning and doing it!

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Laura October 22, 2009 at 3:52 PM

I’m currently studying abroad (junior in college) in western Europe, and though I have zero debt and access to savings thanks to scholarship refunds, the Euro is eating my financial soul. Like someone else mentioned, the constant consciousness of budgeting is really cramping my “OMG, EUROPE” experience. When I feel the negative repercussions in my gut of buying a plane ticket to Rome, for Pete’s sake, I think, “What could I have done differently to make this experience financially relaxed so that I can totally soak up the AWESOMENESS that I’m living right now?”

Answer: Exactly what you and Courtney have done – plan for it.

Whether debt-free goals should come before awesome travel experiences, that’s a different question. I say (or rather, Gustave Flaubert says) “Be regular and orderly in your life so that you may be violent and original in your work.” But never let a moment – a trip, a job, a man/woman, a passion – pass by you, just because you haven’t planned for it.

Kudos.

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Credit Card Chaser October 22, 2009 at 4:06 PM

I won’t weigh in on the trip but one thing that I did want to mention is that I very much agree with your strategy for staying home because A) You get to spend time with your child and B) You get to spend a lot of time working on your goal of getting to $3k in mobile income.

One huge exception that I have always had to paying off a certain type of debt early is when the money could be invested on something with a higher rate of return than the debt is costing you.

For example, even if you take the quality time with your child out of the equation then sure you certainly could get a day job and plow your salary into paying off your debt but think of it like this: since your student loans have a relatively low interest rate then rather than taking a typical day job to pay them off early you are in effect getting a low interest loan to use that money to build your online business.

There is no way that you could go to a bank and get a traditional personal loan to start up a personal finance blog and weight loss blog but by not taking the day job to pay off the student loans early you are in effect getting a loan at a low interest rate to devote your time to really building up your online cash flow producing assets (your websites).

Of course, if you were delaying paying off your student loans early simply because you wanted to use that money to buy a big screen TV and a cappuccino maker or something else that would be a depreciating asset with no cash flow as opposed to a business asset that could very well kick off cash to you for many years then it would be entirely different of course :)
.-= Credit Card Chaser´s last blog ..BOA’s Credit Card Business is Losing Money Yet Still Catching Flak =-.

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Brittney C. October 22, 2009 at 4:29 PM

At least you’re honest…it’s refreshing. We all mean to do exactly what we want to/think we need to, but few of us could follow through 100% of the time. Some of us give up altogether, but you keep trying, and I like it.

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KelsaLynn October 22, 2009 at 4:44 PM

I don’t think it’s really for me to decide whether you’re being a hypocrit or not. Everyone’s situations are so incredibly different, one size does not fit all. If you are okay with the way things are going, that’s great. If not, then step it up a notch. You have to do what’s right for your family, regardless of what someone else thinks/says. But the fact that you toil with this on your own, makes me think you perhaps aren’t completely happy with the decisions you’re making or have made. I could be wrong but it appears something is not sitting right with you and really, your opinion is really the only one that matters.

And finally, I’ll say one last thing that makes a lot of sense to me when I hear it:

Just because you are paying cash for something, doesn’t mean you can afford it.

KelsaLynn
.-= KelsaLynn´s last blog .."What are you training for?" =-.

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Baker October 24, 2009 at 2:47 PM

“Just because you are paying cash for something, doesn’t mean you can afford it.”

Very, very true. Although, we can apply that to everything in life. It’s possible to get food, water, and shelter on even a couple dollars a day (maybe even free), but few would suggest that intensity. So where is the balance?

For us saving up and paying cash is a PREREQUISITE (meaning we won’t borrow), however it doesn’t mean it’s necessary the best choice, which is why I wrote the post, of course.

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Matt Jabs October 22, 2009 at 5:23 PM

No way dude. Like you said, you are actually living the plan you set forth – even though you could have done any number of the other options you listed, you went forward with your plan – there is nothing hypocritical about that. Period.

Continue doing what you’re doing…

Your 6 month plan looks good, my only advice would be – Make sure YOU feel good about it. If you do, then you’re probably on the right track.

Cheers!
.-= Matt Jabs´s last blog ..Debt Testimonials – Rethinking Interest Paid Moves Fred Into Action! =-.

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Stephanie PTY October 22, 2009 at 5:24 PM

There are a lot of thoughts in my head after reading this, but I don’t want to babble. You’ve certainly got enough comments here to read, and I’ll be honest – I didn’t read any of them. (Not that I don’t care what others have to say but… 55 comments is daunting!)

You’re not a hypocrite: you have priorities. And that’s what we all should really be doing, is making priorities. And they should be our own and not subject to the whims of anyone else (except for elses that are significant others and dependents!). It doesn’t seem to me like you’ve gone off track or anything of the sort – we’ve all known from the beginning of this blog of your plans to live overseas and fulfill that dream!

Of course, there’s a part of me that would love to see you save for retirement. But I honestly don’t know how that would work, with you living overseas right now, so I’m not going to push it when I don’t even know what it would entail. I think you’re doing just fine and that when you do start saving for retirement, you’ll do it with the same fiery vengeance that you have for your travel and your loans now… and it will work out in the end.

So cheers, Baker! You’re fine, according to me. :)
.-= Stephanie PTY´s last blog ..Get Me In a Good Mood for Six Months =-.

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Baker October 24, 2009 at 2:52 PM

Thanks, Stephanie! Yeah, my views on retirement are not traditional, per se. However, I do plan on setting aside money once we are out of debt. :-)

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Roblynn October 22, 2009 at 5:38 PM

Hola, I really enjoyed your post and your blog for that matter. My husband and I sold everything, including my business and took early retirement from the P.O. and we moved to Costa Rica to get out of debt. We were able to pay cash for our house and live well for the first two years. The last year has been a little more difficult as prices continue to soar on food etc. We even have to work now, but only six months of the year. We sometimes also wonder if we should have waited a little longer, but the market on the home was perfect timing as well as getting the retirement out. Our big challenge is the credit card. You mentioned that you do not use one and I am wondering how you do that. We use it for airfare back and forth to the U.S. as well as gifts to kids there and stuff for our school. I would love to get rid of it, but it seems essential. I think you are very smart to do your traveling now! Enjoy and keep up the good work. Pura Vida!

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Baker October 24, 2009 at 2:54 PM

Roblynn, we simply use a debit card for everything you outlined! (We still DO have to have a debit card while overseas for certain things like you described).

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Greg - LiveItWithLess October 22, 2009 at 6:22 PM

Imagine if you were sitting at home debt free and thinking, you know what, I really wish I took that chance to go overseas when i had it?
How many people you know take their family half way accross the world to experience life. That s**t is priceless.

I sure when you get back to the states, you will ( pardon the pun ) kill it! and take control of the rest of your debt.

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Financial Samurai October 22, 2009 at 8:47 PM

Wow Baker, $3,000 on a vacation? That’s a lot of money man. I don’t know. I guess we only live once.

Perhaps spend that $3,000 on vacation, and then pay off $3,000 worth of debt immediately when you get home? That’s what I tend to do. If I ever splurge on something stupid, like a $50,000 car, I will immediately drop $50,000 into paying off my rental property mortgage etc.

Do you think because you are now monetizing your site, you are slipping a little? I’m afraid of slipping too, as it’s bee 52 days since I bought anything other than food. I’m getting harassed by so many affiliate sites and stuff which I can’t endorse b/c deep down I don’t fully understand their business. I don’t want to slip, so I’m hesitant to accept all the monetary offers!!

Stand strong Baker.
.-= Financial Samurai´s last blog ..Grab Bag: “How Do You Deal With A Horrendous Day At Work? My Client Is So Unfair!” =-.

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Baker October 24, 2009 at 3:03 PM

Haha, I’ll try not to take the ‘if I ever splurge on something stupid’ as an insult!

We don’t view spending $3000 for three weeks of designed mobile travel stupid. In general our day-to-day expenses fall somewhere between $2000-$2200. That’s even if we were back home, etc.

So $2500-3000 for 3 weeks is, of course, a tick above that, but it’s not some insane mark-up for trying to do a driving tour of the South Island.

And simply ‘paying off $3000 debt’ isn’t an option we have. It’s not like we have extra money sitting around. If we save it targeted (we we have been) for a tour of the South Island, we won’t have the option to pay extra on debt. If we paid extra on debt, we wouldn’t have the money to take the tour. And we wouldn’t dip into emergency fund to pay off debt (or go on ‘vacation’ as you put it).

Lastly, by ‘monetizing’ this site, do you mean the $100 dollars I’ve made after 7 months of 60-80 hours a week? In that case, then no. I don’t think that $100 is making me slip.

I think that you may have meant to say ‘not’ monetizing the site. In which case, once again, that doesn’t factor into this equation.

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Dogfood Provider October 22, 2009 at 8:50 PM

Hypocrite, shmypocrite. You’re living the dream! The stories you and Milligan and Courtney will have to tell, the memories, the experiences – the chance to pick up a killer Kiwi accent! Freaking awesome.

Your destination is unchanged, your flight plan has just been adjusted. No worries, mate!
.-= Dogfood Provider´s last blog ..Man vs. Debt tells Credit Cards Where to Go =-.

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kosmo @ The Casual Observer October 22, 2009 at 9:49 PM

I think you’ve been very patient cultivating your blog to the point where it will provide a mobile income. I suspect that it could provide a decent cash flow right now.
.-= kosmo @ The Casual Observer´s last blog ..A Health Care Plan I Can Believe In =-.

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susan October 22, 2009 at 9:49 PM

Don’t be so hard on yourselves, life evolves, that’s the way it works. You come into the situation where you are now, not where you were. You’ve changed the formula somewhat, but you’re still on task. Sometimes justifications are there b/c it’s what matters most to you in life. It’s a balance, not a militant mindset.

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DD October 22, 2009 at 11:31 PM

I’ll give it up to you for doing all this traveling without adding new debt. But your blog isn’t called Man vs New Debt.

In your Debt Recon post back in March you wanted to get rid your two lowest debts in 6 months time. I realize that plans can change and that it’s good to be flexible. But from what you’ve laid out for us I think you should use your trip money on Special Forces and finally kill that debt.

Not to sound too old fashioned but you shouldn’t count your chickens before they hatch. Like you’ve said, you’ll probably be rolling in dough come April. Well guess when you should wait to travel? When you’re actually rolling in dough, not when you think you will be.

I know you like Dave Ramsey, so you’re probably familiar with his position on taking a vacation while in debt. I’m going to quote him anyway:

“Waaaahhhh! I didn’t go on vacation for two years while I was cleaning up my mess. Listen, your life has been a trip to the beach. Now it’s time to clean up your mess! I’m not saying that you should never go on a vacation. Just don’t go when you’re $20,000 in debt! Suck it up and live like no one else now so later you can live like no one else. That’s what I did. Now I can go to the beach any time I want! You’ve got to break this cycle in your head that you deserve stuff. None of us deserve squat.”
-Dave Ramsey

Whatever you decide to do, I know I’ll enjoy reading about it. Good luck to you.
.-= DD´s last blog ..Need a job? Head to North Dakota =-.

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Baker October 24, 2009 at 3:08 PM

Haha, DD, I love you! Thanks for the great comment.

What you’ve outlined here is exactly what 50% of me feels. It’s the whole reason for the dilemma. Of course, I don’t plan to be ‘rolling in the dough’ come April. I just hope to be able to provide basic living expenses. ;-)

I appreciate your honest advice on allocating the trip money to pay off the two smallest. Like I said, I’m 50-50. I’d love to do both. Ultimately, it may depend on whether we decided on NZ long-term or not. If we will be leaving soon, we will want to tour the South Island before we left.

In that case the ‘red faced two year old’ might win the argument (as Dave would say). If we decide to stay another year or more, than we may try to kill the first two loans (as much as we can) and then save up a little over the next year.

You rock!

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H Lee D October 23, 2009 at 12:23 AM

It also occurs to me to mention, as a woman diagnosed with cancer at 31, that there is some significant relevance in Doing It Now. If something were to happen to your wife in a year, would you rather say, “I’m so glad we didn’t travel so we could pay down debt” or “I’m so glad we didn’t let debt dissolution completely control our lives”? I hope it’s a question you don’t ever need to answer. You’re being responsible about getting it done. It’s all good.

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Erin October 23, 2009 at 12:55 AM

H Lee D wrote above “as a woman diagnosed with cancer at 31″…that resonated with me because I’ve struggled to plan for tomorrow since I learned at such a young that tomorrow isn’t guaranteed. Debt? Who cares…I could be dead tomorrow. The problem? I’m 46 and looking at 3 years before we get our debt paid off! There has to be balance between living for today and planning for tomorrow. I’ve been completely debt free before, but like the dieter who achieves her goal weight, I had no plan for life after debt reduction. This time around, we have a plan, we’ve redefined our lifestyle paradigm.

So, are you being hypocritical? No, but you are rationalizing as you try to define your priorities with a paradigm of your own making. Creating your life is important, so don’t get tripped up on what you’re supposed to be doing…figure out what you’re really doing and what you really want to be doing and then live according to those priorities.
.-= Erin´s last blog ..Pumpkin Swirl Cheesecake =-.

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Gordie Rogers October 23, 2009 at 1:25 AM

Hey Baker,
I was wondering why you chose to settle in Auckland, being the most expensive sity in New Zealand. Dunedin, in the South Island is a lot cheaper, a cool city full of culture and close to all the most beautiful spots in the South Island. Is it still an option to move there?
.-= Gordie Rogers´s last blog ..Online Tools For Lifestyle Design. =-.

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Baker October 24, 2009 at 3:10 PM

J.O.B.S. :-)

We needed to get a sponsored visa and obviously Auckland is the largest market for teaching jobs. Ultimately, this wouldn’t be our first city of choice (given all we’ve heard of other parts of NZ). If we decided to stay long term and have an option to move more rural, we’d probably take it!

But we need the job for the visa, so we are limited by FIRST having employment before moving.

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Daisy October 23, 2009 at 6:41 AM

I agree – paying off your debt, while important, is not an all or nothing quest. By doing such thorough planning, you now have the means to continue to paying off your debt while also enjoying life.

I paid off my last student loan a year ago, and it felt SO good to know that last one was dead and buried. But is that feeling of relief and freedom worth denying yourself the experience of traveling with your family? Hell no!

I still haven’t done any international traveling, but I know that I want to do it while I’m on the younger end of the spectrum (as opposed to waiting until I’m retired and moaning about my sore knee every time I have to climb up old steps). What you are doing is a responsible way to have the best of both worlds, unlike other people I know who decided to go to Europe without much forethought, charged the entire trip, and came back with every credit card maxed out. I think it’s great that you found a way to make this work.

As others have already said, life is too short. A friend of mine just passed away last month at the age of 35 and I know that in those last few days, he wasn’t thinking about how glad he was that he had paid off his student loans. He was glad that he took that solo trip to Australia, spent time with his friends and family, and enjoyed life. Not to sound totally extremist (because I’m definitely not encouraging you to rack up any additional debt), but it’s okay to spend some of your money on non-debt stuff. That doesn’t make you a hypocrite. It makes you someone who is living your life and making the most of what you have while still being responsible and repaying your debt.

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Baker October 24, 2009 at 3:12 PM

Yeah, I had a college friend pass away at 25! 25… ridiculous. Obviously, we can’t live every part of our life under this lense, but it does but some things in perspective.

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Karen October 23, 2009 at 7:57 AM

I’m probably old enough to be your mother, and while I’ve lived frugally most of my adult life, shunning the extravagances and luxuries that many of my contemporaries have acquired, the one thing my husband and I don’t give up are our two years of vacation. We save for it and make it a part of our budget. I liken it to being on a diet (which I also have some experience with). If you cut back severely on calories, you can lose a lot of weight fast, but in time you get sick of being deprived, so you turn around and eat everything in sight and start over again. Some people can just give up sweets and lose weight, while others have to make major long term changes in their diets (me being one of them) in order to sustain their goals. People are different, lifestyles are different, and you and your family have to decide for yourselves what’s most important to you and how you’re going to achieve your personal goals. It took me six years to pay off a $2,000 school loan; those things seem to stick around forever. Have you ever considered going back to your lender and getting reduced payments based upon financial hardship? If you qualify on income, you can get the smaller payment, but keep making the payments you’re making and finish up with them faster. Also, getting a part-time job or doing some extra freelance work to bring in more income might help your guilt.

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Baker October 24, 2009 at 3:13 PM

Karen, you are exactly right. I don’t look at it as guilt (although it very well might be), but in January we will be increasing our income in one way or another. I hope the blog and online opportunities provide this. If not I’ll be working part or full-time in addition to drastically increasing my freelance writing (which would mean decreasing MvD)!

We’ve allowed ourselves until January to see how the situation plays out!

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L October 23, 2009 at 10:34 AM

Enjoy your life, embrace the path you have taken!!!! My husband and I are in the same boat. We owe credit card debt, car loan, and my student loan (plus a mortage). In a week we are going to a small island off of Mexico for 6 days. In April 2010 we are going to Rome, Italy and taking my 17 year old brother, in May 2009 we went to Paris, France and took my sister. Plus I paid for a 5 day stay in Naples, Florida for my mothers bday this year(annual trip that females in my family go on, but my aunt pays and her contruction business was hit very hard). How can we go on these trips with debt? Because travel is important to us! We have taken the path to budget to pay our debt in 2 years (debating on is we will pay of mortage or save the money). When we did our budget we include 2 massive trips per year. We want to prepare for the furture (no debt then have a baby) and enjoy our life now (travel the world). Many would disagree, saying we could pay our debt so much sooner without the trips. That is not the life we want to live. We are frugal in many other areas: eating at home, scaling back on cells/tv channels, saving on gas, using what we have, borrowing when we can. If you must follow your heart!

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Gholmes October 23, 2009 at 12:26 PM

Thats why it is called “personal” finance that makes this journey such a struggle. The concepts seem simple, live on less than you make, stay out of debt, have an emergency fund etc etc etc. Walking that path is so difficult. Enjoy life, be true to yourself and keep pushing on. Get that bondage of debt off you and family as fast as you can.

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Financial Samurai October 23, 2009 at 1:00 PM

One can take joy in the fact that the raging bull market is back, money is still cheap, property prices are rebounding, and 401Ks are higher. Did I just say that? I guess so! B/c according to my survey, many more people than 5.6% earning over $100,000 a year, and the government could very well be overstating 10% US unemployment.

Hmmmmmm…. it’s a great debate we’ve got going!
.-= Financial Samurai´s last blog ..Six Figure Incomes & Unemployment – Challenging Reality By Engaging The Community =-.

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Mama Bird October 23, 2009 at 1:55 PM

Interesting post and comments. I don’t think you are being a hypocrite. I do find it interesting to see how your blog has changed since moving. It was bound to happen though. You are sort of in a limbo state, not really knowing what’s going to happen in the next 6 months to a year. It’s often a hard place to be in, particularly when dealing with finances and goals. I was in this place for many years and found my goals (both personal and financial) changing all the time, which made me feel fickle and hypocritical all the time.

It’s often a hard line, particularly for financially-minded people, to live life fully while also being financially responsible about it. I think you have found something that works for you and that you are comfortable with.

I do wonder, like Jen, if you are making the most of your opportunity of being in NZ, apart from your upcoming trip. There are a lot of wonderful day trip/weekend opportunities where you are. I hope you aren’t so focused on your blog, etc that you are missing what’s outside your ‘cubicle’. In that respect it would be no different than if you were in Indy.

Good luck.

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Baker October 24, 2009 at 3:18 PM

I can realistically say that we *aren’t* making the most of our time. Some of that is by design and some of that is because we aren’t balancing things well. We’ve got several weekend trips coming up to the key parts (or so people tell us) of Auckland.

We also have been to a couple of the West coast beaches and East coast parks with our first Couchsurfing hosts. Of course we stayed a couple weeks on Waiheke Island, too.

A lot of what we are doing is saving up for the South Island tour, however we want to make sure we do some cheap or free options at least every other weekend to explore downtown Auckland more.

It’s harder without a car, but we don’t want to use that as an excuse! There are plenty of ways to get around (we took the train yesterday to a barbecue, which was fun). :-)

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Mama Bird October 26, 2009 at 9:03 AM

Yeah, we didn’t have a car for the first 18 months we lived in Brisbane. We took the train most of the time, then hired a car for longer trips until we saved enough to buy my sister-in-law’s car when she was selling it.

Make sure you go see a Kauri forest…there is one not far north of Aukland. Those trees are amazing.

Good luck ‘getting into life’ while you are there…strike that balance.

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Jun Loayza October 23, 2009 at 2:43 PM

Adam,

I’ve been thinking about this topic for some time now. I would love to live abroad, cut back on the materialistic things in my life, and live frugally. But the more and more that I think about it, that’s just not me and the culture that I grew up in.

The people that I hang out with are very successful (not in social media), and will own a 2-story house near the beach, drive a Mercedes Benz, and send their kids to expensive private schools. I need to do this as well to be happy.

I feel that I’ve been fooling myself into thinking that I want to simplify my life. The more I think about it, how are you saving for a house or for your daughter’s college?

Maybe the answer is that it IS too early to start saving for it.

Either way bro. I have much respect for you and I will push the community blog forward. You have my word.

- Jun
.-= Jun Loayza´s last blog ..Expedition 206 – What does happiness mean to the world? =-.

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Baker October 24, 2009 at 3:23 PM

Jun,

I think in both the cases you outlined you are letting other people define what you need. We are probably victim of this too. On one hand you want to tap into the simplicity and/or travel crowds, but like you said this isn’t you. At least not now.

But that doesn’t mean that you have to swing back just because it’s the culture you grew up in. I don’t think you need those things to be happy. Having spent limited time with you, I think your happiness will be derived from a worthwhile business venture (maybe in terms of money, maybe in terms of something else) combined with surrounding yourself with awesome people.

Maybe that includes a 2-story beach house and a Mercedes. Maybe not! ;-)

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Financial Samurai October 28, 2009 at 12:34 AM

Jun – This comment really got to me “The people that I hang out with are very successful (not in social media), and will own a 2-story house near the beach, drive a Mercedes Benz, and send their kids to expensive private schools. I need to do this as well to be happy.”

Donno man, I think you need to surround yourself with different kinds of friends. Their success seem like they are your resentment now.
.-= Financial Samurai´s last blog ..Financial Samurai $1,000 Giveaway & Your Chance To Make Millions Over Your Career! =-.

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Casey October 23, 2009 at 4:46 PM

You are making your payments, not going into further debt, spending time with your daughter, and traveling. You are at the beginning of your “blogging life” which should just continue to grow with possibilities for online income. As Mama Bird pointed out, it is not hypocritical as long as you are enjoying all that NZ has to offer. Hope you are. I hear it is amazing out there. Cheers up!
.-= Casey´s last blog ..The Greatest Blogger of All-Time! =-.

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Jason of Kim & Jason October 23, 2009 at 11:53 PM

To everything there is a season. If you had your pedal to the metal all the time, you’d burn out. Besides, even though your intentions may be good, focusing so intently on one specific area of life can trick you into missing the boat in other areas. I think you guys seems to have struck a good balance between making smart decisions while not forgetting to acually LIVE life.

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Johanna Parnes October 24, 2009 at 8:14 AM

I think you have done the right thing. It is so much easier to travel before your kids start school and I don’t think it is worth it to save for tomorrow for the rest of your life. It is very easy to keep moving your goal a little bit higher before doing what you dream about and i nthe end you never did it.

Saying this i still haven’t gone on a longer trip with my family, mostly because I like my home but more shorter trips would be nice. We have paid of our house loan and the only debt we have are student loans but they are a strange kind of loans where you pay a percentage of your salary and since I am a SAHM I don’t pay anything and the day I turn 65 they magically disappear so I don’t care about that loan.

I have been thinking about doing a longer trip but it gets much harder when the kids are getting older. We travelled much more before we where bound by school holidays.
Enjoy your trip.

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Nicolas October 24, 2009 at 11:27 AM

I feel like I took the easy way out of life sometimes (by joining the Army). I have had very minimal debt, ever, but since this deployment (Afghanistan) I have managed to pay it completely off. I am saving money, but only because I am deployed… and there is nothing better to do. I have no problems paying my child support, and I buy things I don’t need and it has little to no effect on me. All of this is possible because I joined the military, but what does that really say about me? I couldn’t hack it in the real world? I took the easy route by choosing the difficult road?

Having said all that, I might be debt free and saving money, but I’ve been around my daughter, in her four years of existence, for a total time of one year… four of which were when she was just born. Point I’m trying to make is this, you’re doing an outstanding job, like you’ve always been able to do when you want to, and you’re doing it all with the one’s you love. Nothing is more rewarding than succeeding… especially when you’re doing it before, during, and after a trip around the world. You’re doing what many people only plan for, and doing it well.

It’s good to know that once I get out of the military, I’ll have someone to hit up when my finances catch back up with me. Ciao!

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Baker October 24, 2009 at 3:26 PM

Like you pointed out, there are different parts to the same goal. I don’t think anyone takes the easy or the hard road. You have missed some of your family life, but you are also much farther ahead in other areas. And your family life isn’t finite. You have ample time to get back in on that, just like I’ve got plenty of time to still pay off the rest of our student loans.

See ya soon!

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Little House October 24, 2009 at 12:56 PM

Not a hypocrite. I think it is quite brave of you to out line all of your debt still left. But, hey, it’s all student debt; no credit card debt or consumer debt, and that’s great. I do have a question though, is this your student debt and Courtney’s student debt combined?

thanks for your honesty and good luck on your goals!
.-= Little House´s last blog ..It takes money to save money…. =-.

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FinanciallySmart October 24, 2009 at 4:26 PM

Ok I have been following your blog and it seems you are on the path where you want to live a little. But remember that April is where you are going to re-attacked and my advice to you is to stick to that plan. All the best.

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Amanda October 24, 2009 at 5:14 PM

Baker family, live it up! Everyone is a hypocrite, myself included. I think you can still be dedicated to a purpose (becoming debt free) without sacrificing your lust for life and adventure. You and the family need to have those experiences to enrich your lives together, your emotional well-being, etc. Anyone can stay at home and isolate themselves to just work and ramen noodles until the income finally arrives, but it shouldn’t be at the expense of your sanity…with that said, I can’t wait to hear more about your guys’ tour of the South this winter! We miss you here at home (although as you know, all of your friends are in various parts of the world at the moment)! Stay safe and hope to hear from you guys soon! – Your friend, Amanda

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Steven@HundredGoals.com October 24, 2009 at 9:06 PM

Here’s what I know Baker, life is too short to second guess our every move. You are doing things exactly as you had planned and that in and of itself is an amazing accomplishment. I applaud you for being so bold as to actually make your desires a reality & not using lame excuses to sit on your ass instead. Do you have debt? Sure, you do but so what? It isn’t the end of the world. It may FEEL like the end of the world but I can assure you that indeed, it isn’t. Those of us in the “personal finance” world (though I liken you & I to lifestyle engineers rather than finance bloggers) feel an obligation to make ALL the right choices when it comes to money. We should be maxing out IRAs or 401(k)s, investing and spending less than we earn…at least that is what we feel is expected of us. That simply is not the case. We are human, we are flawed, we make “irrational” decisions based on what is in our hearts. Our mind says it is more responsible to pay down the debt but our heart tells us to follow our passion. I read something today that really got me to thinking:

“Do you measure the quality of a life by its duration or by the intensity with which it’s lived?”

If you aren’t living intensely, if you aren’t chasing your ambitions, if you are going to let “responsibility” hold you back…whats the point? In my opinion Baker, you’re doing everything right. Don’t feel like you are hypocritical, don’t feel guilty, don’t second guess your choices. Live passionately and allow the fire in your heart to burn wildly. Thats what life is about.
.-= Steven@HundredGoals.com´s last blog ..Two Guys on a Journey: Part Two =-.

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Foo Finance October 26, 2009 at 4:07 PM

Want to be more Frugal? Skip the south island tour and do it yourself. I did exactly that in 2006. Bus schedules are easy in NZ and I stayed at hostels. That would be harder with Milligan but I bet you can find some reasonable guest houses and couch surfing around the south island.

$3000 USD is a LOT for 3 weeks of travel in NZ. I bet I spent a third of that doing it on my own. Grab the Lonely Planet for New Zealand and I guarantee you will have more fun that on a tour. I am a hardcore, do-it-yourself budget traveler and planning your own logistics save thousands (literally). Feel free to contact me and I will be glad to give you some pointers if you like. There are much better things you can do with that money!

- Bobby (Foo Finance)
.-= Foo Finance´s last blog ..How to start saving for the future =-.

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Charlotte October 27, 2009 at 8:45 PM

Baker,

At least you are being honest and working it out.

Anyway, no money could take the place of the travel experience. In my opinion it is totally worth it expecially if it is a”calculated risk”. We’ve traveled, moved, been unemployed etc and do not regret the money we spent seeing the world. We are still paying for some of it now but there is nothing like that experience. You are young enough to “recover” and besides why waste your life saving money so that when you are 70 you can travel the world. Big difference! Disclaimer: I am against debt but we have taken that calcualted risk ourselves. Each one is different and can find a good balance between preparing for the future and enjoying today.

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Car October 28, 2009 at 1:16 AM

In regards to paying off your debt – as others have pointed out, there was no way you could have kept up that extreme intensity forever before burning out. The debt you have now is essentially “good debt” and from the sounds of it, Courtney has been able to use the degree to make money.

Question: If you had delayed the trip 18-24 months and became debt free, would it have taken you even longer to travel to NZ because you would have needed savings in addition to all the money you’d have needed to pay off the debt? Hypothetically, it may have taken you guys three years to realize your dreams. At that point, Milligan may have been ready to go to school and simply taking off may not have been an option.

Anyway, I haven’t read your blog for very long but I find you an inspiration. Your hard work ethic shines and in particular, I really admire the fact you are starting your own business while traveling AND being a husband and father! You seem to apply great tenacity with everything you do in your life.

I will be in a similar dilemma in a few years. I will probably have at least 20k in student debt, but I have a strong desire to travel and see the world. I want to travel while I still have my health and I am unmarried/child free. Working holidays definitely seem to provide that balance!

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Greg C October 28, 2009 at 2:18 AM

It looks like all lower rate student loan debt. I NEVER plan on paying more than the minimum on mine. I am taking 20 years. It would be a lot different if it were variable high rate revolving debt.

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quinsy October 28, 2009 at 2:32 AM

I have to admit I would also like to know why your South Island trip is so expensive, considering it is a car tour… I took a monthlong car tour of South Island 2 years ago and we really didn’t spend much at all since the BBH hostels are generally so nice and cheap for members (for anyone who has not been there, the BBH hostels in NZ tend to be like quaint small hotels rather than rooms full of bunk beds). I guess there is the car part, that could be a big deal since you said you don’t have a car now and renting or purchasing are both expensive. Otherwise perhaps just a lot of skydiving in Queenstown? The only thing I missed out on with my tour was doing the Milford track with the pricey trek option, we are saving that for someday… but I assume you’re not doing a trek with a toddler. :-)

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Baker October 28, 2009 at 2:54 AM

The biggest issue is the transportation. It’s the peakest of peak seasons during the only time we can go. The cheap rental options are from $24-27 per day, not including insurance or gas. The cheapest campervan options are $80-99 per day, and some of these we can use because we need three seatbelts and room for a car seat.

As far as hostels go, there ARE some decent options. Keep in mind that we can’t (or rather aren’t willing) to stay at many of the cheapest of cheaps with our daughter. We also can’t do bunk options and have to get solo rooms (even though we’ve still found very cheap great deals).

If it were Courtney and me only, I shudder at how cheaply we could tour even in peak season. We are planning on doing Milford, Fox Glacier, and Nevis Bungee. Those are the biggest ticket items. A lot of rental places offer 2 for 1 Milfords, although if we both do Nevis that’s 450-500 right there.

The bungee is something that is hit or miss for me. I’m sure it’ll be an experience we will remember for a lifetime being on of the biggest jumps in the world. Of course, there’s always more we can do and always something we are going to miss.

Working with a couple companies to try to find ways to cut corners or cut down from 3 weeks to 2 weeks and remove some of the cities and driving, etc… We’ll see!

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confused December 13, 2009 at 12:15 AM

Baker,

I am constantly having fights with myself about what I am doing with my life. Traveling has become a passion of mine over the past few years in college. I now have a good paying full-time job fresh out of college. I am on track to pay off all of my student loans by July. I am in a job that I know I won’t want for the rest of my life, but earning money is addicting. I am on track to setting myself up for a nice financial future. Now the problem is that staying in a job like this obviously limits my travel. I would love to go to Asia or South America for longer term (2 or 3 months). But when I think of putting my career on hold, it really forces me to forget about traveling. But of course I want to see the world. This cost/benefit analysis drives me crazy. Continue building for a great financial future? Or see the world while I am young and without responsibilities? Obviously you cannot provide the answer for me, but what was the thought process you had when making your decision?

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Jessica February 2, 2010 at 1:50 PM

Yes, that is an INCREDIBLE amount of debt, and I don’t think you should be traveling. You should be putting away money for your daughter’s education–so that she doesn’t face the same problems. Sure, work hard for another 2 years–and THEN travel. Then all the money funneled into minimum payments can be going to a retirement fund and a college fund.

I am working through graduate school right now, and everyone thinks I’m insane. “Working full time? And going to school full time? Why don’t you just take out a LOAN?” Because when I’m done, I’ll be debt-free, with $10,000 in my pocket. Student loans are pure, pure evil perpetuating a never-ending cycle of poverty.

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Elysia February 11, 2010 at 11:29 AM

Adam,
I just had to say how impressed I am at your sharing all of this with everyone. No one even reads my blog and although I put up the total number, I don’t list out the separate debts, because I am completely and totally embarrassed to have them. (We’re 39 if that helps for clarity.)
I think the thing I’m struggling with most right now is that I have a plan, I’m paying down debt (credit card #2 gets flushed this month) and if (as we hope) all goes according to plan, we could have everything paid off including our mortgage in about 8.5 years. It’s slow… it’s frustrating… but hell, we got ourselves into this and we’re getting ourselves out. But we also have two kids (4 and 6) and we need and want to spend time with them, and I feel like we need to still be saving some for retirement/college. I *know* the return on paying off the debt is higher (and guaranteed), but I still want to contribute to my 401k. And I feel like I should be saving for college. If I wait 5 more years (payoff last student loan date) to start saving for that, my kids will be 9 and 11, that doesn’t feel like enough time to save for college :-(.
I just feel like so much of the advice out there says I can’t or shouldn’t save for college and retirement while I have debt, but if I have a plan, and I’m not compromising that plan, and everything will be paid of in 8.5 years (which is a long time, but not *sooo* long if you’re including a mortgage), is it really that irresponsible?

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Caroline February 14, 2010 at 8:58 AM

I think it was good you went – better to actually do the thing you most wanted to do than keep delaying and copping out the other way – by not even going. That said, I’m leaving my b/f after 5 years to go do what I’ve always wanted to do – grad school abroad. I helped him cut his $55k debt down to $28k over the past 4 years, but screw it. I’m done waiting for him to catch up to my level of frugality and desire for minimalism. Yes, it’s Valentine’s Day. He’s a good person, we’re just not on the same page. I don’t think I could live with the regret of not doing what I really want to do.

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Jonathan Drake April 2, 2010 at 1:19 AM

and yes it ( mantravelsaroundtheworldwhilehepaystheminimumonhisstudentloans.com ) is available.

Great Site.

-Jonathan

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Carly Wilson February 22, 2011 at 1:21 AM

I know I’m like two years late on this one but just wanted to say that I admire what you are doing here. Sure, you lost a bit of momentum in terms of paying down your debts but you got to have the experience of traveling and doing what you love. Your daughter is at a stage in her life where she is picking up every single vibe out there and your vibe is saying “we are responsible and make plans to have a kick ass life that we love”. That’s priceless!! I live in Australia (moved here four years ago from the US) and have never been able to do much traveling around because I’ve been busy making ends meet and spending money on stupid crap. Your site has totally inspired me and I am now about three weeks from paying down my credit card!

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Brex July 23, 2011 at 3:25 PM

I love your stuff. I just started reading a few months ago but i have to say you are one of the best bloggers I’ve read, mainly, b/c i LOVVVVE the radical honesty on the money front.
We keep wanting to travel the world and we say things like “in a year when all the debt is paid off” but i think the fact that you paid some off and then went and traveled is smart b/c it lets you know you can make it financially and gives you the reason to keep pushing for that goal. Plus, i know from experience that traveling helps to put things into perspective.

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